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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Shri S.S. Godara & Shri Laxmi Prasad Sahu
Assessment Year: 2009-10 Smt. Ramadevi Singareddy, Vs. The Income Tax Officer, Hyderabad. Ward 6(3), PAN No.ABWPS5314G Hyderabad. (Appellant) (Respondent) Assessee by: Shri A. Srinivas. Revenue by: Shri Rohit Majumdar Date of hearing: 03.01.2022 Date of pronouncement: 05.01.2022 O R D E R Per S. S. Godara, J.M. This assessee’s appeal for A.Y. 2009-10 arises from the Commissioner of Income Tax (Appeals) - 12, Hyderabad’s order dated 02.11.2017 in involving proceedings u/s. 143 r.w.s. 254 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both parties. Case file perused.
We note at the outset that the CIT(A)’s detailed discussion affirming the Assessing Officer’s action making unexplained cash deposits addition of Rs.8,50,000/- in assessment order dated 28.12.2011; forming subject matter of the assessee’s sole substantive ground canvassed herein, reads as under :
“4.1 The appellant has raised 7 grounds. While ground nos.2 to 5 are related to the addition made on account of unexplained investment of Rs.8,50,000/-; the other grounds are general in nature which do not require any separate adjudication. The specific grounds are taken up for detailed discussion and disposal, in the ensuing paragraphs of this order.
5. During the course of appellate proceedings, the appellant filed written submission along with additional evidence under rule 46A on 10.03.2017 as under: "Copy of Patta pass Book bearing Patta number 1233 to an extent of 6.30 acres." 5.1 The Additional evidence under Rule.46A filed before the undersigned was forwarded to the Assessing Officer. The Assessing Officer submitted his remand report on 22.08.2017. The same was forwarded to the appellant for comments. The submissions of the appellant's AR on the remand report were received on 20.09.2017. The issues involved in this case are decided as under based on the written submissions of the Assessing Officer and the AR, the arguments made by the AR, and the material available on record.
6. Unexplained cash deposit in bank account of Rs.8,50,000/-: 6.1 During the course of assessment proceedings, the Assessing Officer observed on perusal of bank statement that assessee has deposited cash of Rs.8,34,000/- in Karur Vysya Bank on 09.07.2008. The Assessing Officer requested the assessee to furnish source- of cash deposit in her savings bank account. In response the assessee submitted before Assessing Officer a note stating that she received a gift of Rs.8,50,000/- from her parents-in-law as a gift and submitted a copy of gift deed of Rs.8,50,000/-in her favour. The assessee claimed that her parents-in-law own 21 acres of agricultural land at Konda Sunkesula Village and confirmed that they have given her gift of Rs.8,50,000/- out of agricultural income earned by them. However, the assessee failed to produce copy of land holdings pass book in their name, the details of crops grown, yield received, gross agricultural income, expenses, net income etc., and proof for sale of agricultural produce and expenses incurred in respect of the agricultural income of the donor. The assessee therefore failed to prove before the Assessing Officer the identity, genuineness and creditworthiness of the donor. In the absence of these basic details, the Assessing Officer treated the gift amount of Rs.8,50,000/-; as unexplained investment by way of cash deposit into bank account and added it back to the assessee's income. 6.2 During the course of appellate proceedings, the appellant's AR filed written submissions along with additional evidence under Rule.46A of I.T.Rules, 1962 on 10.03.2017, enclosing therewith copy of Patta pass book bearing patta number 1233 to an extent of 6.30 acres, as against the claim of appellant made before the Assessing Officer during assessment proceedings that the donor had possessed 21 acres of agricultural land. 6.3 In the remand report dated 22.08.2017, the Assessing Officer has stated as under: "4. In this regard, it is to submit that it is well-settled principle that the assessee has not only to establish the identity of the person making the gift but also has to establish the financial capacity of the donor to make the gift and also to establish the genuineness of the gifts. It is the duty of the assessee to establish by necessary evidence that the gifts claimed to have been received was genuine. Moreover, it is also necessary for the assessee to prove the financial capacity of the donor to make the gifts. In this regard necessary evidence in the shape of the income-earned by the donor as also the financial status at the time of making the gift would be necessary. The assessee is further required to provide complete address of the donors so that if required proper verification is made possible. Though there is no bar to make the gifts, yet it would be necessary for the assessee to explain the circumstances under which the gift was made so that the genuineness of such gifts could be verified. The burden of establishing the identity, financial capacity of the donors and the genuineness of the gifts invariably lies on the assessee.
However, in the instant case, the assessee has only filed copies of the patta pass book of her father-in law in support of his capacity to make a cash gift of Rs.8,50,000/-. Mere filing of patta pass book and mere disclosure of " agricultural income does not tantamount to true and full disclosure of the actual sources of income of the donor to make gift. Various Hon'ble Courts have held that it is for the person to prove that income sought to be taxed is agricultural income exempt from taxation under the Income Tax Act. It has been, further, held that the person has to produce satisfactory evidence about his being engaged in agricultural activities and proof of crops grown, yield of the crops, bills/ vouchers for purchase of pesticides, fertilizers and other expenses incurred, sale bills of the agricultural produce, confirmation/ certificate from the concerned VAG regarding ownership of agricultural lands and the agriculture income earned. The assessee failed to furnish any of the above mentioned evidences to substantiate the claim made.
Further, it is important to mention here that the assessee has not furnished any returns of income of the donor so as to verify whether the donor has shown any agriculture income or any agriculture lands as asset in the Balance sheet year after year. Furthermore, the assessee has stated that her father in law has made the gift by way of cash and the same was not given by way of cheques. This goes to show that the assessee's father in law had kept accumulated agricultural savings in cash at home and given the gift as and when required. It is to state that keeping cash in village is against human probability. It may be theoretically possible to argue that it is open to a person to keep all the cash with him/her at home but we have to take into account the human probabilities and the normal course of human conduct, more so when there is banking facilities even in remote villages in the recent past. Assessment proceedings are akin to civil proceedings and have to be proceeded on the basis of preponderance of probabilities, which is against the above explanation. Therefore, the contention of the assessee that cash deposit of Rs.8,50,000/- was from out of the cash gift received from father in law met out of past sayings of agriculture income defies logic and not corroborated with proper evidence.
Moreover, since it has been informed in the CIT(A) letter that the donor Sri.K. Chenna Reddy (Father in law of the assessee) has attained heavenly abode, he could not be examined about the identity, financial capacity and the genuineness of the gift made by him to the assessee. " 6.4 The appellant was given an opportunity to furnish her submissions/comments on the said remand report of the Assessing Officer. Written submission was filed by the appellant's AR on 20.09.2017 reiterating the earlier contentions, but not furnishing any fresh evidence. 6.5 I have carefully considered the submissions of the appellant, the order of the Assessing Officer, the additional evidence furnished as well as the comments of the Assessing Officer thereon and the counter- comments of the AR. As rightly observed by the Assessing Officer, mere possession of agricultural land does not mean that the land was yielding. If at all the land was yielding, evidence should have been furnished regarding the type of crop, to what extent the yield is, expenses incurred and the sale particulars of the yield. The appellant neither produced any evidence with regard to donor's agricultural activity nor the creditworthiness of the donor either during assessment proceedings or during remand proceedings or during appellate proceedings. During the assessment proceedings, the appellant claimed that the donor possessed land of 21 acres, whereas during appellate proceedings, the AR has furnished as additional evidence copy of patta pass book to an extent of 6.30 acres only. Thus, even the possession of 21 acres of agriculture land, as claimed, is in doubt. The age of the donor on his subsequent demise does not prevent the submission of the evidences, which are being filed through appellant's AR only. In view of the above, the Assessing Officer's order in treating the cash deposit of Rs.8,50,000/- as unexplained deposit in the hands of the appellant is justified. Therefore, the Ground nos.2 to 5 related to this issue are DISMISSED.”
Learned authorized representative vehemently challenged the correctness of both the lower authorities’ action making the impugned addition. His case in tune with the assessee’s pleadings throughout is that the impugned sum represents gift received from her in laws; and more particularly father-in-law only, who had sufficient agricultural lands admeasuring 21 acres. We find no merit in her arguments since she could only prove her father-in-law’s ownership on land measuring 6.30 acres only without having any clarity about his other sources of income, family size and other relevant aspects. We quote hon’ble apex court’s landmark decisions in Sumati Dayal Vs. CIT (1995) [214 ITR 801] (SC) and CIT Vs. Durga Prasad More (1971) [82 ITR 540] (SC) that any evidence submitted during the course of income tax proceedings has to be examined in light of human probabilities by removing all blinkers to conclude that the learned lower authorities have rightly made the impugned addition in assessee’s hands. She fails in her sole substantive grievance therefore.
This assessee’s appeal is dismissed.